ADDvise Group AB (publ)

Welcome to Advice Group Q3 2024 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Staffan Thorstensen and CFO Johan Urwa. Please go ahead.

Thank you, operator, and good afternoon to all of you. Our performance in the third quarter clearly reflects the impact of our ongoing efficiency initiatives, including the improved capital structure finalized during the first half of this year. Cash flow and earnings were in line with our expectations. The top line growth was somewhat soft in the quarter, mainly due to a single large order of lab equipment to Ella Lilly worth 23 million, which was invoiced in Q3 2024. Despite that, we saw strong momentum in our healthcare consumables and clinical trials business. We continue to see healthy demand for medical equipment across Europe, as well as in North and South America. From a global perspective, 2025 has so far been turbulent with friction in world trade and ongoing geopolitical tensions. We are closely monitoring these developments, but chose to focus on things we can influence. And that is why we continue to work hard every day to create value for our customers and shareholders as efficiently as possible. We are also experiencing headwinds from strengthening of the Swedish krona, which has impacted both our top line and earnings through translation effects. Looking ahead, our focus remains clear. Strong and growing cash flow generated by our existing group companies enable us to acquire additional cash flow and drive long-term shareholder value. With that, let's take a closer look at our Q3 results. Our net sales came in at 363 million SEK, which took us to a year over year decline of 4.8% adjusted for FX and minus 10, including FX. Our order intake in the quarter declined by 17% or 12% FX adjusted. mainly due to the large order from Saab in Q3 2024. That order was 32.5 million. The year-to-date figure is also impacted by the larger clean rooms orders we received last year. Within the lab segment, order intake for the quarter showed healthy growth of roughly 14%. But the year to date figure were heavily affected by last year's record clean orders, the largest ever within the business area. We will continue to see some volatility in order intakes given the project nature of these larger orders. However, excluding the impact of Eli Lilly and the clean room orders, our year-to-date order intake showed slightly growth. It is also important to note that order intake is not a relevant leading indicator for most of our businesses, since we deliver continuously against order rather than building backlog. EBITDA came in at 56 million SEK in line with last year, which take us to a margin of 60%, stronger than Q3 last year, where we reached roughly 14%. Looking at the cash flow from operation, it came in strong at 35 million SEK. A big contributor was lower financing expenses, 21 million versus 44 for Q3 last year. Net leverage for the end of the period was 3.2 times, an increase from three times last quarter, mainly affected by paid earnouts. Adjusted net profit came in at 19 million SEK compared to minus 5 in Q3 last year. And again, lower financial costs, lower tax and increased operational efficiency were the drivers. Coming into the commercial and operational highlights of this quarter, we saw balanced business momentum in both healthcare and lab during the quarter. We continue to focus on efficiency initiatives to make sure that we are maximizing our potential to drive value. EBITDA And EBITDA margin improved year over year. The margin came in at 15.5% compared to the 13.7%. Main drivers are product mix and efficiency improvements. Managing working capital is one of our top priorities. During the quarter, we saw a healthy increase in cash flow compared to the same quarter last year. As mentioned before, lower financial expenses, lower tax payments and moderate working capital build, which came in at the 5.5 million SEK. And that was the main drivers. In terms of geography, approximately half or 47% of our sales in the quarter came from US or North America, and our second largest market is Europe, and the third is South America. Looking at our sales by product category, the top three for the quarter are laboratory equipment, 36, and medical consumables 37 and medical equipment 22. high activity in medical equipment and continued good balance demand in clinical trials lab equipment is as mentioned earlier affected by tough comparables due to the sale of 2.1 million euro to Ella Lilly in Q3 last year. Splitting the group into healthcare and love and looking at healthcare, our sales came in at 234 million SEK in the quarter. Organic growth close to flat, it was 0.2% FX adjusted and minus 6.2% non-adjusted. Looking at the year-to-date figure, we saw an organic decrease of minus 1.4% and adjusted for FX is a growth of 4.2%. The lab segment reported sales of 129 million SEK for the quarter. Organic sales came in at minus 16.2 and FX adjusted, we ended up at minus 12.7. Looking at profit margins, healthcare came in at 16% EBITDA margin and lab at 17.2 in the quarter isolated. Looking at net sales by geography for the healthcare segment, North America is continuing to be a key market with approximately 60% of sales and will continue to be so for a long time. Europe has a good development. In the lab segment, Europe is the largest market followed by US. We remain focused on profitable growth, stable returns and maintaining well-balanced debt levels. A strong emphasis is placed on EBITDA growth and return on capital employed as our key financial performance indicators. Long-term EBITDA growth will be driven by a combination of organic expansion and strategic acquisitions. Our long-term target is to double EBITDA every five years. We are committed to maintaining a maximum net debt to EBITDA ratio of three times. While dividend remains part of our long-term financial framework, distributions will be considered only once all other long-term financial targets are met at the sustainable and appropriate level. I'm now handing over to Johan to take you through the group's financial performance.

Thank you, Staffan, and good afternoon all. I'm happy to be here today and take you through the figures for the third quarter of 2025. EBITDA, which is Edvise's main metric for measuring profit, gives a fair view of the financial performance of our companies. EBITDA is defined as operating profit before amortization, impairment, expenses and revaluations related to acquisitions, as well as non-recurring items. And just as a reminder, EBITDA is our key metric from this year, 2025, and figures in this graph have been historically adjusted with a new definition. And EBITDA in the third quarter amounted to 56 million, which corresponds to a margin of 15.5%. EBITDA has improved by 1 million compared to the same period last year. And EBITDA margin has improved to 15.5 compared to 13.7 last year. And I'm happy to see the profit is increasing despite the currency headwinds from both US dollars and Brazilian reais. And this is thanks to all of our companies working hard every day to improve operational efficiency, which focus on profit, profitability and cash flow, which is the key to our long-term performance. As we have pointed out in earlier reports, 2024 faced tough comparables from 2023. The individual quarters of 2024 should be considered normal level of profits which means that from Q4 2024 and onwards, we see normalized levels of sales and profitability on a rolling 12 months basis. And for the last 12 months, EBITDA amounts to 268 million, which corresponds to a margin of 16.5%. Moving on to cash flow and capital efficiency, And here, when we talk about cash generation, we look at the underlying cash flow generated by our businesses with deductions from changes in working capital, as well as depreciation and investments in our asset base, including lease payments. In the third quarter, we see a moderate working capital build of 5.5 million, mainly driven by account receivable increase. Working capital efficiency and optimization is and will always be a key focus area for us and our companies. Depreciation includes depreciation on fixed assets as well as on right of use assets related to leases. And the net between depreciation, leases and investments is 2.3 million, indicating a lower new investments compared to depreciation on existing assets, mainly driven by lower investments this year in production efficiency in South America and as well as clinical trial business compared to last year. Total cash generation from operations in the quarter was 53 million. Relative to an EBITDA of 56 million, we consider this a solid and satisfactory level of cash generation in the quarter. and a testament of our never-ending focus on cash flow. Return on capital employed, which measures profitability and how efficient we use our capital, was 12% in the quarter. And this is one of our long-term financial targets where the long-term goal is 15% return on capital employed. Moving on to the financial position, Here, our long term target is three times net debt over EBITDA. And net leverage at the end of Q3 was 3.2 times EBITDA. The new capital structure means significantly lower financing costs, which improves operating cash flow and reduces net leverage over time. Total financing expenses in Q3 was 21 million SEK compared to 44 million last year. In this quarter, this effect was met by earn-out transactions. And the rights issue for the first half of this year added 457 million before transaction costs to the company. It also included warrants that could potentially add 114 million SEK to the company or up to a maximum 172 million in Q1 2026 if all the warrants are fully exercised. Available liquidity is good. Cash at the end of the quarter was 131 million SEK with an additional 114 million available in unused credit facilities. And this was all from me. I will now hand over to Staffan for some closing remarks.